Allied Properties Real Estate Investment Trust · TSX:AP.UN
Allied Properties Real Estate Investment Trust — Investor Presentation (November 2021)
74 slides from Allied Properties Real Estate Investment Trust's investor presentation, Nov 9, 2021
Slide 1: Creativity & Connectivity
CREATIVITY & CONNECTIVITY November 2021
Slide 2: Forward-looking information
This presentation may contain forward-looking information about future events or Allied’s future performance. This information, by its nature, is subject to risks and uncertainties that may cause actual events or results to differ materially, including those described under the heading “Risks and Un
Slide 3: Table of Contents
TABLE OF CONTENTS Investment Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Rental Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Development
Slide 4: Investment Highlights
INVESTMENT HIGHLIGHTS – At the forefront of urban intensification in Canada’s major cities – Fully internalized and entrepreneurial management team – Strong growth platform – Strong financial foundation – 26.63% compound annual growth rate on total assets – 14.0% average annual total return 4
Slide 5: Portfolio Growth - Total Assets
PORTFOLIO GROWTH - TOTAL ASSETS (M) 128M IPO 10.1B Q3 2021 26.63% CAGR Values up to December 31st, 2009 are based on financial reporting prepared in accordance with previous Canadian GAAP standards. Values after that date are reported in accordance with International Financial Reporting Standards (I
Slide 6: Focused on Increasing Distribution and Growing NAV per Unit
FOCUSED ON INCREASING OUR DISTRIBUTION AND GROWING OUR NAV PER UNIT OVER TIME ANNUALIZED DISTRIBUTION PER UNIT (1) NAV PER UNIT (2) (1) Annual distribution rate in place at March 15 of each year. (2) NAV per unit value as of September 30, 2021. 6
Slide 7: Returns to Unitholders
RETURNS TO UNITHOLDERS TOTAL RETURN INDEX Allied S&P / TSX Total Returns Index S&P / TSX Capped REIT Index 14.0% AVERAGE ANNUAL TOTAL RETURN Source: Bloomberg as of September 30, 2021. 7
Slide 8: NOI by Space Type
FOCUSED ON OPERATING DISTINCTIVE URBAN WORKSPACES AND URBAN DATA CENTRES: NOI BY SPACE TYPE (IN $M) (1) (1) (1) (1) (1) The NOI allocation between office, UDC and retail was updated to conform to the presentation in recent years. As of September 30, 2021. This slide contains forward-looking informat
Slide 9: Strategy
ALLIED Strategy
Slide 10: Consolidation of Urban Office Properties
CONSOLIDATION OF URBAN OFFICE PROPERTIES – Close to core – Distinctive – Lower occupancy costs 10
Slide 11: 500-522 King West, Toronto
500-522 King West Toronto 11
Slide 12: The Landing, Vancouver
The Landing Vancouver 12
Slide 13: 35-39 Front Street East, Toronto
35-39 Front Street East Toronto 13
Slide 14: 14
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Slide 15: 15
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Slide 16: 16
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Slide 17: 17
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Slide 18: Intensification of Urban Office Properties
INTENSIFICATION OF URBAN OFFICE PROPERTIES – Underutilized land – Additional rentable area with low land cost – Value creation 18
Slide 19: Intensification of QRC West
Intensification of QRC West Toronto 19
Slide 20: Intensification of QRC West
Intensification of QRC West Toronto 20
Slide 21: Intensification of The Breithaupt Block
Intensification of The Breithaupt Block Kitchener 21
Slide 22: King Portland Centre
King Portland Centre Toronto 22
Slide 23: Rental Portfolio
ALLIED Rental Portfolio
Slide 24: Summary of Rental Properties
SUMMARY OF RENTAL PROPERTIES TOTAL RENTAL PORTFOLIO GLA 194 Rental Properties valued at $8.2B 14.1M SF TORONTO (Not including 11 Properties Under Development valued at $1.2B) CENTRAL REGION VANCOUVER 4.8M SF WESTERN REGION INCLUDING URBAN DATA CENTRES 510K SF 644K SF LEASED 95.1% LEASED 91.9% MARKET
Slide 25: Montréal Portfolio
MONTRÉAL PORTFOLIO Mile-Ex BE RN AR T. S D AV L E. AU PA RE RK NT AV N BL E. V ST D. UR . ST BA .D IN Mile End EN ST IS . ST HE . R N RU LA IJ UR U ES IER LIE AV AIN N E. ST BO E AV SA T- U .A IN E. RÉ LE T- C MB VA AN ST OU M TO RD I RO R JA IN CE AT VI CQ E ISE LL ST L W Central LE UE E- .W AT ST
Slide 26: Toronto Portfolio
TORONTO PORTFOLIO COLLEGE ST. REIT JOINT VENTURE N DUFFERIN ST. ANCILLARY PARKING Little Italy DUNDAS ST. W. BAY ST. UNIVERSITY AVE. SPADINA AVE. CHURCH ST. SHERBOURNE ST. PARLIAMENT ST. JARVIS ST. QUEEN ST. W. STRACHAN AVE. RICHMOND ST. W. RICHMOND ST. E. Corktown YONGE ST. ADELAIDE ST. W. BATHURST
Slide 27: Calgary Portfolio
CALGARY PORTFOLIO CENTRE ST. S Downtown 4 AVE SW 5 AVE SW 6 AVE SW Central 7 AVE SW Business District N 8 AVE SW Stephen Ave. 9 AVE SW 10 AVE. SW 11 AVE. SW 12 AVE. SW SE 3 ST. SE OLYMPIC WAY SE 13 AVE. SW E. 2 ST. SW 4 ST. SW 8 ST. SW 1 ST. SW 5 ST. SW AV 1 ST. SE Beltline Inglewood 12 9A 17 AVE. S
Slide 28: Vancouver Portfolio
W G Y H 99 BE JE TO AC RV N H ST IS . PA AV ST CI . E. FI C BU TE ST . ST . TH BU U RR RL O AR W D D RA ST ST . . KE ST . D AV H IE EL ST M CK . E N ST RI . CH AR N H H D O S EL AM M ST SO IL ER . M N TO ST AI N ST N ST . . G LA RA N . N D VI ST LL . E ST . Yaletown RO CA BS M O N BI E ST BE . W AT
Slide 29: Urban Workspace Top-Ten Properties
URBAN WORKSPACE TOP-TEN PROPERTIES NORMALIZED APPRAISED PROPERTY NAME LQA NOI FAIR VALUE CAP RATE PRINCIPAL USERS CITÉ MULTIMÉDIA, MONTRÉAL $19,785 $420,100 4.75% Desjardins, Morgan Stanley, PF Resolu Canada Inc 1001 BOULEVARD ROBERT- 17,140 367,490 5.25% AON Canada Inc, Autorité Régionale de Transp
Slide 30: Network-Dense Urban Data Centres
NETWORK-DENSE URBAN DATA CENTRES NORMALIZED APPRAISED PROPERTY NAME LQA NOI FAIR VALUE CAP RATE PRINCIPAL USERS 151 FRONT W, TORONTO $40,844 $648,260 5.00% Bell, Cologix, Equinix, Digital Realty 250 FRONT W, TORONTO 16,168 340,280 5.75% AWS, Cloud Service Provider 905 KING W, TORONTO 4,667 102,960 5
Slide 31: Connectivity
CONNECTIVITY Source: PeeringDB.com 31
Slide 32: Urban Data Centres: Critical Communications Infrastructure
OUR URBAN DATA CENTRES ARE A CRITICAL COMPONENT OF CANADA’S COMMUNICATIONS INFRASTRUCTURE (1) Reflects NOI for the nine months ended September 30, 2021, with the remainder of the year based on LQA NOI for the most recently completed quarter. 32
Slide 33: NOI by Segment / NOI by Use
NOI BY SEGMENT NOI BY USE 16.9% 16.9% NOI BY SEGMENT NOI BY USE URBAN DATA CENTRES URBAN DATA CENTRES 40.0% TORONTO 11.2% AND CALGARY, 8.6% KITCHENER EDMONTON RETAIL AND VANCOUVER 3.4% PARKING 31.9% Urban Data Centres Calgary, Edmonton and Vancouver Montréal and Ottawa Toronto and Kitchener Urban Da
Slide 34: Lease Maturities - Urban Workspace
LEASE MATURITIES - URBAN WORKSPACE As of September 30, 2021. This slide contains forward-looking information. 34
Slide 35: Lease Maturities - Montréal and Ottawa
LEASE MATURITIES - URBAN WORKSPACE MONTRÉAL AND OTTAWA % OF TOTAL GLA W/A RENTAL RATE ESTIMATED W/A MARKET RATE 25.0% $35.00 $30.00 20.0% $25.00 15.0% $18.91 $20.00 $18.22 $17.57 $17.72 $17.39 $18.03 $17.60 $16.95 $16.67 $16.55 $15.00 10.0% 9.2% 6.9% $10.00 6.4% 5.0% 4.1% 3.3% $5.00 0.0% $0.00 Decem
Slide 36: Lease Maturities - Toronto and Kitchener
LEASE MATURITIES - URBAN WORKSPACE TORONTO AND KITCHENER % OF TOTAL GLA W/A RENTAL RATE ESTIMATED W/A MARKET RATE 25.0% $35.00 $31.28 $30.44 $30.32 $28.81 $30.00 $29.94 20.0% $26.94 $26.16 $25.52 $25.00 $22.64 $21.31 15.1% 15.0% 13.6% $20.00 12.6% $15.00 10.0% 8.9% $10.00 5.9% 5.0% $5.00 0.0% $0.00
Slide 37: Lease Maturities - Calgary and Vancouver
LEASE MATURITIES - URBAN WORKSPACE CALGARY AND VANCOUVER % OF TOTAL GLA W/A RENTAL RATE ESTIMATED W/A MARKET RATE 25.0% $35.00 $30.00 20.0% $27.05 $26.17 $25.00 16.6% $25.33 $20.35 $20.39 $19.79 15.0% $21.01 $20.77 $20.00 $18.63 13.9% 12.1% $15.00 10.0% 9.2% $12.49 $10.00 5.0% 3.0% $5.00 0.0% $0.00
Slide 38: Lease Maturities - Urban Data Centres
LEASE MATURITIES - URBAN DATA CENTRES % OF TOTAL GLA W/A RENTAL RATE ESTIMATED W/A MARKET RATE 25.0% $160.00 $140.62 $135.89 $140.00 $136.27 $135.50 20.0% 18.6% $120.00 $107.67 $100.97 $106.97 15.0% $100.00 15.0% $89.72 $97.12 $89.72 $80.00 10.6% 10.0% $60.00 $40.00 4.8% 5.0% $20.00 0.3% 0.0% $0.00
Slide 39: Top-Ten Users Q3 2021
TOP-TEN USERS USER SECTOR % RENTAL REVENUE % TOTAL GLA 49% CLOUD SERVICE PROVIDER Data Centre/IT 4.4% 0.6% UBISOFT Gaming/IT 2.5% 3.9% COLOGIX Data Centre/IT 2.4% 0.5% 2003 EQUINIX Data Centre/IT 2.2% 0.4% 20.0% GOOGLE CANADA CORPORATION IT 1.9% 2.4% NATIONAL CAPITAL COMMISSION, A CANADIAN CROWN COR
Slide 40: Development Portfolio
ALLIED Development Portfolio
Slide 41: Active Development Pipeline
ACTIVE DEVELOPMENT PIPELINE % OF OFFICE % OF OFFICE DEVELOPMENT DEVELOPMENT 2021 2023 57% ESTIMATED PRE-LEASED ESTIMATED PRE-LEASED GLA NOI GLA NOI THE LOUGHEED 88,000 TBD — QRC WEST, PHASE II 93,134 $4.6M 100% COLLEGE & MANNING* 27,000 $1.1M N/A 93,134 $4.6M 115,000 $1.1M+ PRE-LEASED % OF OFFICE %
Slide 42: Future/Shadow Development Pipeline
FUTURE/SHADOW DEVELOPMENT PIPELINE Zoning Approval in Rezoning Potential Place and in Progress ESTIMATED ESTIMATED Toronto GLA GLA THE CASTLE 460,000 TORONTO 5,828,763 KING & PETER 790,000 MONTRÉAL 1,972,724 UNION CENTRE 1,330,000 CALGARY 1,151,015 BATHURST STREET OTHER 394,399 ASSEMBLY 318,000 9,34
Slide 43: The Lougheed, Calgary
The Lougheed Calgary 43
Slide 44: Boardwalk-Revillon Building, Edmonton
Boardwalk-Revillon Building Edmonton 44
Slide 45: 400 Atlantic, Montréal
400 Atlantic Montréal 45
Slide 46: Breithaupt III, Kitchener
Breithaupt III Kitchener 46
Slide 47: The Well, Toronto
The Well Toronto 47
Slide 48: Adelaide & Duncan, Toronto
Adelaide & Duncan Toronto 48
Slide 49: QRC West Phase II, Toronto
QRC West Phase II Toronto 49
Slide 50: KING Toronto
ied eee KING Toronto Toronto
Slide 51: King & Brant, Toronto
_—— King & Brant Toronto 51
Slide 52: 400 West Georgia, Vancouver
400 West Georgia Vancouver 52
Slide 53: Development Completions
ALLIED Development Completions
Slide 54: QRC West, Toronto
QRC WEST, TORONTO This was a pioneering, large-scale intensification project that involved the integratation of two restored heritage buildings with a new, mid-rise office structure. The project commenced in 2010 and was completed in 2015. It is comprised of 345,274 square feet of GLA and is fully l
Slide 55: The Breithaupt Block, Kitchener
THE BREITHAUPT BLOCK, KITCHENER Allied acquired an undivided 50% interest in the property in 2010 and immediately put it into development, completing the first phase in 2014 and the second phase in mid-2016. The property is an equal two-way joint arrangement between Allied and Perimeter Development
Slide 56: 180 John Street, Toronto
180 JOHN STREET, TORONTO Allied acquired the property in 2015. The property was redeveloped and was completed in 2017. It is comprised of 45,631 square feet of GLA and is fully leased. DEVELOPMENT ECONOMICS INVESTMENT LAND COSTS $8,700 HARD & SOFT COSTS 17,500 VALUE CAPITALIZED INTEREST & UNLEVERED
Slide 57: 189 Joseph, Kitchener
189 JOSEPH, KITCHENER 189 Joseph was purchased as part of The Tannery in 2012. The building stood vacant, and was slated to be demolished before Allied proposed the redevelopment and secured Deloitte as the user. The project commenced in late-2015 and was completed mid-2017. It is comprised of 26,46
Slide 58: 425 Viger, Montréal
425 VIGER, MONTRÉAL In 2004, Allied expanded into Montréal with the purchase of 425 Viger. At the time, the property comprised of 200,000 square feet of GLA and was fully leased. In 2007, Allied purchased the adjacent parking lot with the intention of intensifying the combined property once the main
Slide 59: King Portland Centre, Toronto
KING PORTLAND CENTRE, TORONTO In 2012, Allied entered into an equal two-way joint arrangement with RioCan to develop King Portland Centre. Allied and RioCan each acquired an undivided 50% interest in 642 King W and 620 King W and subsequently put them into development, completing 642 King W in early
Slide 60: Risk Management
ALLIED Risk Management
Slide 61: Development Risk Management
DEVELOPMENT – 15% limitation on development – Pre-leasing – Partial monetization – Financial management – Collaboration 61
Slide 62: Balance Sheet
BALANCE SHEET – Low leverage – Long-term, fixed-rate debt – Net debt to EBITDA ratio of 8.9x – Debt ratio 32.9% – Interest coverage ratio of 3.4x The above ratios are calculated as at September 30, 2021, Interest coverage ratio includes capitalized interest and excludes prepayment costs. Debt in “de
Slide 63: Financial Covenants
FINANCIAL COVENANTS SENIOR UNSECURED DEBENTURES COVENANT THRESHOLD SEPTEMBER 30, 2021 PRO FORMA INTEREST COVERAGE RATIO Maintain a 12-month rolling consolidated 3.5x pro forma EBITDA of at least 1.65 times pro forma interest expense PRO FORMA ASSET COVERAGE TEST Maintain net consolidated debt below
Slide 64: Debt Maturity Chart
DEBT MATURITY CHART MORTGAGES UNSECURED TERM LOANS UNSECURED DEBENTURES CONSOLIDATED W/A INT RATE Weighted Average Term to Maturity 7.0 years Weighted Average MILLIONS Interest Rate 2.94% This chart summarizes the principal payable in regards to Allied's debt obligations as at September 30, 2021. 64
Slide 65: Unencumbered Investment Properties
UNENCUMBERED INVESTMENT PROPERTIES UNENCUMBERED INVESTMENT PROPERTIES % OF INVESTMENT PROPERTIES UNENCUMBERED As of September 30, 2021. 65
Slide 66: Maximizing Flexibility While Strengthening the Balance Sheet
MAXIMIZING FLEXIBILTY WHILE STRENGTHENING THE BALANCE SHEET UNENCUMBERED INVESTMENT PROPERTIES TOTAL INVESTMENT PROPERTIES UNSECURED DEBT AS % OF TOTAL DEBT CREDIT RATINGS Investment grade since 2014 BBB BILLIONS Stable Baa2 12% Stable CONSISTENT STOCKPILE OF LIQUIDITY 2014 2015 2016 2017 2018 2019
Slide 67: Environmental, Social & Governance (ESG)
Environmental, Social & Governance (ESG) 67
Slide 68: ESG Reporting
ESG REPORTING – Allied prepared its Second Annual ESG Report in alignment with the Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB) Real Estate Standard. Allied intends to report its progress on the Task Force on Climate-related Financial Disclosures (TCFD)
Slide 69: ESG Strategy
ESG STRATEGY GOALS 2024 TARGETS Energy management Sustainable design standards Energy Use Intensity Reduce the energy consumption at our Build long-term value by integrating sustainable Average Energy Use Intensity (EUI) of 22.6 kWh/ft² properties by optimizing systems design and design requirements
Slide 70: Massey Hall
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Slide 71: Appendix Definitions
ALLIED Appendix Definitions
Slide 72: Certain Definitions and Non-IFRS Measures
CERTAIN DEFINITIONS AND NON-IFRS MEASURES Certain defined terms used in this investor presentation have the following meaning: “EBITDA” EBITDA is a non-IFRS financial measure and should not be considered as an alternative to net income or net income and comprehensive income, cash flow from operating
Slide 73: Total Debt, Total Return
“TOTAL DEBT” Total debt is a non-IFRS financial measure and does not have any standard meaning prescribed by IFRS. As computed by us, total debt may differ from similar computations reported by other Canadian real estate investment trusts and, accordingly, may not be comparable to similar computatio
Slide 74: alliedreit.com
ALLIED 134 PETER STREET, SUITE 1700 TORONTO, ONTARIO M5V 2H2 T 416.977.9002 F 416.306.8704 alliedreit.com
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